“Tam Company is negotiating for the purchase of equipment that would cost $100,000, with the expectation that $20,000 per year could be saved in cash-operating costs if the equipment were acquired. The equipment’s estimated useful life is 10 years, with no residual value, and would be depreciated by the straight-line method. Tam’s predetermined minimum desired rate of return is 12%. Present value of an annuity of 1 at 12% for 10 periods is 5.65. Present value of 1 due in 10 periods at 12% is .322. Ignore income taxes. 110. Payback period is: a. 4.0 years. b. 4.4 years. c. 4.5 years. d. 5.0 years.”,”4Payback Period = Purchase Price = $100,000 = 5 yearsCash Saved 20

“Tam Company is negotiating for the purchase of equipment that would cost $100,000, with the expectation that $20,000 per year could be saved in cash-operating costs if the equipment were acquired. The equipment’s estimated useful life is 10 years, with no residual value, and would be depreciated by the straight-line method. Tam’s predetermined minimum desired rate of return is 12%. Present value of an annuity of 1 at 12% for 10 periods is 5.65. Present value of 1 due in 10 periods at 12% is .322. Ignore income taxes. 110. Payback period is: a. 4.0 years. b. 4.4 years. c. 4.5 years. d. 5.0 years.”,”4Payback Period = Purchase Price = $100,000 = 5 yearsCash Saved 20

000″